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Rachel Reeves’ unusual stance of giving a big speech on the eve of the Budget has left investors with more questions than answers, and done nothing to remove uncertainty around taxes.
The bond market would be happy if the chancellor raises taxes as it would help to improve public finances and make the UK less risky from an investment perspective. It was telling that the 10-year gilt yield fell as Reeves began her speech, indicating that bond investors thought we’d get confirmation that taxes would go up at the Budget. But as it became clear that Reeves was merely dancing around the topic, yields went back up.
The chancellor said the speech was about giving context to the challenges facing the government, but she batted away questions about taxes faster than an Olympic table tennis player.
Many people are fed up with this game. There are growing calls for the chancellor to be crystal clear in her plans and make bolder decisions. No-one will be shocked at tax rises and many people believe it is better to sort the situation out once and for all, rather than keep tinkering at the edges. This feels like Reeves’ last chance to fix the house, otherwise her days could be numbered.
Palantir
It speaks to just how supercharged Palantir’s share price has been in 2025 that even a set of numbers as impressive as those it produced for its third quarter were insufficient to sustain the momentum.
Even in the context of the booming AI sector, the company’s valuation has reached high levels as investors have seized on its perceived close links with the Trump administration and AI-driven revenue growth.
The company’s work with government agencies and intelligence communities means its operations can, as a matter of necessity, be opaque.
What is certain is the company is generating significant revenue, with a meaningful uplift in its annual sales guidance unveiled alongside its third-quarter update.
Not everyone is a fan. Hedge fund manager Michael Burry, who was brought to prominence by the 2015 film The Big Short, revealed a short position on the stock earlier this week.
Time will tell if Burry has got his timing right or if the share decline in pre-market trading simply represents a pause for breath before Palantir starts racing higher again.
Tesla
Norway’s sovereign wealth fund is set to vote no on Elon Musk’s $1 trillion pay package as tensions build ahead of a meeting to decide the matter on 6 November.
In isolation, this decision may not make too much difference, given its relatively modest holding of 1.1%, but it follows on from advice from shareholder advisory firms Glass Lewis and ISS to reject the deal, something which led Musk to dub them ‘corporate terrorists’.
Separately, chair Robyn Denholm has warned Musk could walk away if he doesn’t get what he wants, dialling up the stakes still further.
Achieving the headline number involves hitting demanding objectives and on Musk’s ability to move Tesla beyond being an EV manufacturer to a broader AI and technology business.
The vote will be a test of shareholders faith in Musk’s ability to deliver on his grand visions.
BP
In a timely boost for embattled BP CEO Murray Auchincloss, BP has posted better than anticipated quarterly figures.
Auchincloss’ strategy of pivoting back to a focus on oil and gas has received criticism from some investors who saw long-term logic in a shift towards greener forms of energy and others who do not believe he is going far or fast enough.
Even new chair Albert Manifold has said execution on this strategy needs to be quicker. Investors will hope he can draw on his experience at Irish building materials firm CRH, where he oversaw a substantial increase in the share price and helped lead a shift in its main stock listing to New York.
A $750 million buyback provides some reward for BP investors’ patience as management look to turn around a super tanker of a business. Encouragement will be taken from the fact BP expects its full-year proceeds from divested assets to be higher than previous guidance.
This is crucial to BP’s ambition to bring borrowings under control. One thing BP has limited control over is the oil price which was sharply lower in the three months to 30 September compared with the same period a year ago.
There may be some relief then at the recent decision by producers’ cartel Opec+ to pause increases in output at the start of next year.
Domino’s Pizza
Domino’s Pizza may have delivered a solid outcome in the third quarter but the main takeaway for the market is that the backdrop is looking dicey.
This was reflected in a drop in order volumes for the period, partly as franchisees reacted to higher costs by pushing through higher prices.
A measure of reassurance was delivered as Domino’s stuck with its full-year guidance and the recent problems at competitor Pizza Hut may enable it to improve its competitive position.
Primark / Associated British Foods
The break-up that Associated British Foods said would never happen is now on the cards. It has long argued that having a collection of businesses was better than splitting itself up into individual components. That meant keeping Primark within a broader conglomerate structure that also includes food interests. The argument went that if one part wasn’t doing well, the others would act as a cushion to keep everything hunky dory.
Over the years, many people have expressed a desire to only invest in Primark, rather than have its rapid growth diluted by non-retail interests. While Primark continues to expand, growth has been harder to achieve amidst a more challenging consumer environment. That’s a factor affecting most retailers rather than an indication of Primark going wrong.
The big question is what’s triggered a rethink by the board. The fact the share price hasn’t really gone anywhere in the past two years could be a factor. Over the past five years, Next has delivered a 130% share price gain versus just 36% from Associated British Foods. That sort of underperformance must have caused considerable frustration to Primark’s owner.
The board now seems to have finally woken up to the fact that it might benefit from splitting into two, as the component parts appeal to different types of investors. Primark might even command a much higher valuation as a standalone listed entity.
Associated British Foods says it is considering all options but essentially that means the wheels are being greased for a corporate break-up.
It’s all the rage at present, with the likes of Unilever, Kraft Heinz and Warner Bros Discovery among those in the process of undertaking a demerger.
The idea of ‘slimming to greatness’ is based on the principle that big companies might benefit from having a tighter focus rather than spinning three or four plates at the same time.
Investors like it, as they can pick and choose the parts of a business they want to back or avoid. Divisional management are also free to make more entrepreneurial decisions rather than having a parent company pulling the strings.
Dan Coatsworth: Head of Markets
Dan Coatsworth is AJ Bell's Head of Markets. Dan has been with the company since December 2012 and has more than 18 years' experience in the industry, following the markets and all things investing. He...
